Types of Home Sales
"Standard" or Owner Sales
These are your standard transactions where the seller has enough equity in to sell their home and pay off any mortgage and/or liens on the property. These are the more of a hassle-free transaction than REO's and are normally pretty painless. Expect bidding wars, quick turnaround times, minimal paperwork, and more smiling faces at the closing table. You don't usually get as good of a deal on owner sales as you would the other types of sales, but you will more than likely have a move-in ready home. If you're short on time or patience this is the perfect transaction for you! *Expect to settle within 30-45 days depending on your loan.
This is a sale in which the seller's proceeds are not enough to cover their outstanding mortgage, so the bank agrees to take a loss. These homes will normally say somewhere in the description that the sale is "contingent on 3rd party approval." This means the sale rests on the bank agreeing to eat the difference between what they are owed and what they are willing to take. As a buyer, your offer will first need to be accepted by the homeowner, then it will be presented to the bank for approval. This is great for buyers who want a fantastic deal on a home and have a LOT of patience. Short sales can also give you extra time to gather funds for your downpayment or closing costs if needed. *Expect anywhere from 30 days to 10 months for bank approval, then an additional 30 days to close your loan.
Real Estate Owned (REO)/Bank Owned Properties/Foreclosures
In this type of deal, the property has gone through the foreclosure process and is now owned by the bank. REO's can be some of the best deals you will find on the market, but there are a few things that you will need to consider. First of all, foreclosures aren't always in the best condition, so getting a bank to give you a loan on these properties can be an issue. This is the type of sale that you hear horror stories about, homes filled with mold, missing appliances, big holes in the walls or ripped up flooring...Expect to put 10-20% down or consider a repair loan -- 203k loans are a great way to keep that downpayment lower when buying REO's. Ask me for details. Secondly, due to the low prices, you will often find that there are multiple offers on these properties. This can cause more paperwork, drive up prices, and sometimes mean having to look for other deals. Banks normally have their own addenda and offer an incentive to the buyer if you close with their title company. Overall, these are a great deal and most investors find the headache worth it to get the deal! Make sure your agent knows what he/she is doing and you will be fine. Anticipate extra paperwork and a few extra days for responses. *Expect 30-60 days to settle.
Where do I start...typical home purchasers will want to avoid this type of sale. Auctions occur when a bank, local government, or estate need to offload inventory. You must bring cash or certified funds to the event to cover your deposit, which can be as high as 10% of the winning bid. Additional fees like a bid premium, which can be anywhere from 3-5% of the purchase price, may be required to secure your bid. Absolutely talk to a professional before pursuing this type of transaction. There is a lot of information you want to keep an eye on; existing bills or liens against the property, estimated value, auction dates and locations, and required bidding premiums. *Expect to settle anywhere between 10-60 days from the auction date depending on your terms of sale, with the potential that the former property owner can redeem their property within 30 days by law.
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Lothian MD Homes for Sale - Genna Fleming, REALTOR® with EXIT ELITE REALTY
You now have free access to Southern Maryland’s Ultimate Real Estate Search Engine! Your local real estate expert has the knowledge and experience to deliver the unsurpassed service you deserve. Local Specialty: Upper Marlboro, Lanham, Lothian, Edgewater, Annapolis, and Dunkirk as well as all of Southern Anne Arundel County and Southern Maryland. Google or call me today and let’s discuss how I can save you $1,000’s when you buy or sell real estate. Call Genna Fleming at (443) 532-8917 or @Ask_Genna by visiting www.AskGenna.REALTOR.